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How a New Generation of Filmmakers, Tax Incentives Are Buoying the Latin American Film Sector

Strong local box office is also adding to region's rise.

From the New Argentine Cinema to Brazil’s steady supply of low-budget festival hits and Mexico’s new foreign filming incentives, there are elements that differentiate each of the Latin American film industries, but the region has never been more united.

“All Latin American countries have different strengths and weaknesses,” explains Hugo Villa, director of film production at the Mexican Film Institute. “Some have a larger and more experienced local industry, others have an emerging generation of financiers, or a huge base of college students on film related majors.”

To those not so well acquainted with this region, the trends that tie together these colorful territories can be harder to pin-down.

They include the growth of local content production, and its uptake in different markets; a cross-pollination process between larger and smaller Latin American film and audiovisual industries, as well as non-Latin American partners.

“Latin American cinema is building a solid network of production services and co production partners for all kinds of production and content,” explains Villa.

Across the continent, initiatives to boost local film industries and attract foreign productions are on the rise:

• Colombia is working on a proposal for a new tax incentive plan specifically designed for international productions, and is now attracting studio projects.
• Mexico has a new 17.5 percent rebate scheme, introduced last March, which has attracted several large productions.
•Buenos Aires is working on a foreign financing scheme.
• In Uruguay, there is an incentive for production services and co-productions, that gives a VAT exemption of 22 percent and helps the export of audio-visual content with up to 75 percent.
• Brazil offers a plethora of filming incentives and has become hot all round, thanks to hit local films, the export of its directors to Hollywood, and the increasing relevance of its box-office returns.

In 2010, the Brazilian theatrical market saw 135 million admissions, which surpassed the 110 million admissions seen in 2009, giving the country its strongest performance in a decade. And local films are on the rise: The approximately 80 Brazilian films (including international co-productions) released in 2009 accounted for 15 percent of the market, a 50 percent increase compared to 2008.

In 2010, a Brazilian film, José Padilha’s Elite Squad: The Enemy Within was the highest-grossing film in Brazil, out grossing even Avatar, with a box office take in excess of $70 million. By selling 11 million tickets it also became the most watched Brazilian film of all time, surpassing the record set by Bruno Barreto’s Dona Flor way back in 1976.

“Brazil aggressively stimulates international co-productions,” explains Andre Sturm, chairman of the film promotion and export agency, Cinema do Brasil. “The country has valid co-production agreements with Argentina, Canada, Chile, France, Italy, Germany, Spain, Portugal and Venezuela and is signatory to multilateral treaties such as the Ibero-American Film Integration and the Latin American Film Co-Production agreements.”

Indeed, film incentives abound in Brazil for both foreign and local productions. Brazil's annual federal public support for film production, distribution and exhibition amounts to approximately $78 million alone.

Brazilian directors are in demand both at home and abroad. The highest grossing film this year at the international box office, Rio, was directed by a Brazilian, Carlos Saldanha, who was also responsible for Fox’s Ice Age trilogy. Padilha, meanwhile, will direct the reboot of RoboCop for MGM and Walter Salles [Central Station, Motorcycle Diaries] is putting the finishing touches to On the Road, based on the Jack Kerouac novel.

Meanwhile Fernando Meirelles [City of God, Constant Gardener] is currently filming 360 in Europe, an adaptation of La Ronde starring Anthony Hopkins, Jude Law and Rachel Weisz. It is reported that Meirelles will follow that with an Aristotle Onassis bio pic.

In Mexico, an incentive called PRO AV, which was introduced last year, gives up to 17.5 percent of the production spend in Mexico back to foreign films. So far, four large-scale films have taken advantage of the scheme, including Colombiana, a Europacorp production written and produced by Luc Besson and starring Zoe Saldana.

Other high-profile movies shot partially in Mexico last year include Relativity Media’s Limitless, which lensed in Puerto Vallarta, directed by Neil Burger and starring Bradley Cooper and Robert De Niro. Salles’ On the Road, also shot in the Mexican states of Coahuila and Puebla.

The PRO Av incentive has been a huge hit in Mexico, and in Argentina an effort is underway to draft similar legislation. “At the moment, we don’t have national incentives for the cinema productions, but in the city of Buenos Aires we are working on the implementation of an Audiovisual Law, which declares the audiovisual sector as an industry and therefore provides a series of tax reductions to the local companies,” explains the Argentine film commissioner, Ana Aizenberg. “This, of course, will also benefit international productions, by lowering the costs of producing in Buenos Aires.”

Columbia, meanwhile, is now on the radar of the Hollywood studios and has been progressively building its own industry in the last decade.

Fox has become the first studio to produce there -- its upcoming release Bunker is a co-production with Spain.

“It’s a mark of the growth and the potential of the Colombian film business that a major studio decided to co-produce and invest in a Colombian film,” says Jason Resnick, a consultant to the Colombian Film Commission and a former executive at Universal and Focus Features who is now a consultant-producer. “It is the first time a studio has invested in a Colombian film. To me this sets a high water mark for the Colombian market.”

Public funding is available for Colombian productions and co-productions. The Colombian Cinema Law, which was issued in 2003, created the Film Development Fund, which provides financial incentives to festival competition winners and supports film-related processes (script development, production, post-production and distribution). It also provides automatic incentives for festival promotion and participation.

“Colombian productions and co-productions are entitled to these non-repayable incentives and grants,” says Silvia Echeverri, the Colombian Film Commissioner. “The greatest challenge for the Colombian film industry is to attract a bigger audience not only nationally but internationally by coproducing more films and incorporating international talent to local films in order to get audience from other countries in Latin America, and the Latin audience in the United States.”

Meanwhile, in Uruguay, film commissioner Lucila Bortagaray says the industry is celebrating a substantial growth in film releases in the last few years. “This year, there will not only be feature film releases, but also documentary and animated feature,” she says.

In 2001, Uruguay was exporting 15 percent of its audio-visual production. Today, this amounts to 90 percent.
That is thanks in part to the growth of several funds designed to promote the industry, including the ICAU, Instituto del Cine y Audiovisual del Uruguay which offers $1 million per year to contribute to the development, production, and the release of feature films.

Uruguay’s has also benifited from a number of versatile locations. Places as different as the Old Havana, Paris, London, Germany, the Caribbean, Italy or Ireland have been re-created in Uruguay, which is currently preparing to receive a new Serbian production.